Correlation Between Outcrop Gold and Jaxon Mining

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Can any of the company-specific risk be diversified away by investing in both Outcrop Gold and Jaxon Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Outcrop Gold and Jaxon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outcrop Gold Corp and Jaxon Mining, you can compare the effects of market volatilities on Outcrop Gold and Jaxon Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Outcrop Gold with a short position of Jaxon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outcrop Gold and Jaxon Mining.

Diversification Opportunities for Outcrop Gold and Jaxon Mining

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Outcrop and Jaxon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Outcrop Gold Corp and Jaxon Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaxon Mining and Outcrop Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Outcrop Gold Corp are associated (or correlated) with Jaxon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaxon Mining has no effect on the direction of Outcrop Gold i.e., Outcrop Gold and Jaxon Mining go up and down completely randomly.

Pair Corralation between Outcrop Gold and Jaxon Mining

If you would invest  21.00  in Outcrop Gold Corp on September 23, 2024 and sell it today you would lose (1.00) from holding Outcrop Gold Corp or give up 4.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Outcrop Gold Corp  vs.  Jaxon Mining

 Performance 
       Timeline  
Outcrop Gold Corp 

Risk-Adjusted Performance

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Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Outcrop Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Outcrop Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Jaxon Mining 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Jaxon Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Jaxon Mining is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Outcrop Gold and Jaxon Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Outcrop Gold and Jaxon Mining

The main advantage of trading using opposite Outcrop Gold and Jaxon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outcrop Gold position performs unexpectedly, Jaxon Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jaxon Mining will offset losses from the drop in Jaxon Mining's long position.
The idea behind Outcrop Gold Corp and Jaxon Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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